Washington State House Democrats


House passes Rep. Pollet bill to protect students from deceptive practices by for-profit colleges and career schools

Olympia – The Washington House of Representatives passed legislation to protect students at for-profit colleges or career schools in Washington from deceptive and fraudulent advertising and recruitment claims. HB 1439, by Representative Gerry Pollet (D-Seattle, vice-chair of the House Higher Education Committee) was passed by a 64-34 bipartisan vote.

“Washington’s students deserve protection from the high profile cases we have seen of large for-profit college and vocational school chains who engaged in numerous deceptive and abusive practices,” Pollet said. “Some promised prospective students jobs, careers, and further opportunities in education that the schools could not provide. Many schools inflated job placement numbers and/or promised career services resources that did not exist.”

In 2016, Pollet succeeding in gaining approval through the supplemental budget to authorize the William D. Ruckelshaus Center to lead a collaborative stakeholder review of the for-profit career school and college sector in Washington and how the schools are regulated by different agencies with a hodge-podge of different standards. The first phase of that review produced a recommendation included in the bill the House just passed, requiring honest disclosure of outcomes in student recruitment efforts.

“Many honest for-profit career schools and colleges are harmed by competitors who use these deceptive practices,” said Pollet. “It’s only fair to provide the honest schools with a level playing field.” The Northwest Career Colleges Federation and other stakeholders are actively participating in the Ruckelshaus Center process, while some national college chains oppose the legislation, including the Zenith Education Group, which now owns many of the scandal plagued Corinthian and Everest Colleges.

Some national chains of for-profit colleges have been caught engaging in business practices that are deceptive and harmful to students. For example:

  • Corinthian / Everest Colleges was found to have been selling students loans with 15% interest rates and 6% loan origination fees, which students were required to pay back while still in school. The federal government documented that Corinthian barred students from class if they were 30 days behind on a payment, and 60% of its students defaulted on their loans within 3 years
  • Federal prosecutors and the California Attorney General found that Corinthian marketed to veterans and targeted recruitment of students who had “minimal to nonexistent understanding of basic financial concepts” (US District Court, US Federal Consumer Financial Protection Bureau v. Corinthian Colleges, Everest College)
  • Corinthian charged students $33,000 – $43,000 for an Associate’s degree, compared with our community colleges which charge under $10,000
  • An Associated Press investigative report found that Zenith, which bought Everest Colleges from Corinthian, kept airing the same deceptive ads which had been cited in state and federal lawsuits against Corinthian

“It’s unconscionable that some of these schools led students into massive student loan debts with no realistic chance of paying off the loans,” said Pollet. “Other Washington state students found themselves having paid for years of school with huge loans only to find that schools had misrepresented that their credits would transfer when the schools closed. It is up to us to protect student consumers here in Washington because the federal government is clearly not going to under the new administration.”

HB 1439 would authorize continuation of the Ruckelshaus study, using a facilitated dialogue between schools, agencies and other stakeholders. The bill also directs the study to include recommendations on creating an Ombud to help protect student consumers at these schools, as well as recommendations for how the schools are regulated in Washington. Currently, three different state agencies have some oversight role regulating for-profit career schools, resulting in widely different requirements for protecting students when a school closes.

The measure now moves to the Senate for further consideration.